The implementation of the rlogin protocol in all of the affected systems, and the implementation of the telnet protocol in affected KDE 2 systems, allows a carefully crafted URL in an HTML page, HTML email or other KIO-enabled application to execute arbitrary commands on the system using the victim's account on the vulnerable machine.

The vulnerability potentially enables local or remote attackers to compromise a victim's account and execute arbitrary commands on the local system with the victim's privileges, such as erasing files, accessing data or installing trojans.

from KDE advisory 20021111-2 :
The resLISa daemon contains a buffer overflow vulnerability which potentially enables any local user to obtain access to a raw socket if 'reslisa' is installed SUID root. This vulnerability was discovered by the iDEFENSE security team and Texonet.

The lisa daemon contains a buffer overflow vulnerability which potentially enables any local user, as well any any remote attacker on the LAN who is able to gain control of the LISa port (7741 by default), to obtain root rivileges.

In addition, a remote attacker potentially may be able to gain access to a victim's account by using an "lan://" URL in an HTML page or via another KDE application. These vulnerabilities were discovered by Olaf Kirch at SuSE Linux AG.